I agree that the career colleges and traditional colleges have migrated toward one another. Ironically, the regulations that some traditional educators pushed for put the career colleges in more direct competition with traditional institutions. That put the traditionals in a situation whereby they had to modify practices to be more competitive - including adding shorter programs (i.e. executive MBAs, etc.) and being more agressive in their student recruitment activies - which makes them act more like the career college sector.
Media is a powerful force and the attention it has drawn certainly can influence the regulators. Others argue that even the bad media attention is positive for consumers as it creates a more skeptical buyer that will do more due dilegence before selecting a college to attend.